Investing in America

1. Investing in America Aim: How do Americans invest their money? ERHS Mr. Graboski

2. Investing in America • Investing: Using money that you have saved to earn more money (financial gain). • Securities: Investments that give their holders the right to receive some form of return, or profit. The two most common kinds of securities are stocks and bonds.

3. Investing in America • Bond: Is a loan in which the borrower promises to pay the lender a fixed rate of interest over the term of the loan and then repay the principal at the end of the term, or date of maturity.

4. Investing in America • The two types of government bonds are Treasury Bonds and Municipal Bonds.

5. Investing in America

6. Investing in America • When the federal government needs to borrow money, it issues bonds. Treasury bond terms range from 10 to 30 years.

7. Investing in America • Corporate Bonds are issued by corporations, and are riskier to invest in than government bonds. Why? • There are two types of corporate bonds, investment grade bonds and junk bonds. Junk bonds offer higher potential returns in exchange for a moderately higher risk that the company might fail.

8. Investing in America • Stocks: Are securities that represent an ownership share in a business. • When a company issues shares of stock, it is actually selling ownership rights. • Investors who buy the company’s stock become its shareholders. These shareholders own the company.

9. Taxes • Capital Gains taxes are charge on income received from the sale of stocks, bonds, and property.